Apr 20, 2014

The Skyscraper Curse

Once again, EPJ has an interesting piece out about what is called the "Skyscraper Curse". This is the weird phenomenon that whenever a record setting tall building is constructed, an economic downturn or "bust" cycle occurs. Here is an interesting graphic to illustrate the point:

Mark Thornton of the Mises Institute has dedicated a portion of his scholarly efforts to illustrating this interesting correlation. A sampling of his work can be found here:

At first blush, it seems improbable that skyscrapers could be an indicator or predictor of economic downturns. However, once it is understood how business cycles occur- namely the economic effects of Federal Reserve money printing- the phenomenon makes perfect sense.